Treatment of Cash Discount.....
This query is : Resolved
17 May 2011
I am dealer in TATA DOCOMO Sim Cards. The purchase bill shows as follows:
Gross Value - 100.00
Less: Cash Discount - 10.00
--------
Net Value - 90.00
Add:VAT@4% on 100.00 - 4.00
--------
Total Amount - 94.00
========
My Question is whether the VAT charged on the Gross Amount of Rs.100/- is correct? or it should have been charged on the Net Value of Rs.90.00?
Gross Value - 100.00
Less: Cash Discount - 10.00
--------
Net Value - 90.00
Add:VAT@4% on 100.00 - 4.00
--------
Total Amount - 94.00
========
My Question is whether the VAT charged on the Gross Amount of Rs.100/- is correct? or it should have been charged on the Net Value of Rs.90.00?
17 May 2011
VAT charged on the gross amount is not correct.It has to be charged on the net value.
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